Commodity Online
SINGAPORE: Oil prices plunged below $106 in Asian trade Tuesday as investors shifted their focus to slowing global demand after worries about Hurricane Gustav subsided.
Light, sweet crude for October delivery was trading at $106.03 a barrel in electronic trading on the New York Mercantile Exchange midafternoon in Singapore, and at one point dropped as low as $105.46.
In London, October Brent crude was down $2.01 to $107.40 a barrel on the ICE Futures exchange.
On Monday, when U.S. trading was closed for Labor Day, the contract had plunged $4.34 to $111.12 a barrel in late electronic trading. On Friday, the contract settled at $115.46 a barrel.
Traders were relieved that Gustav weakened as it approached the offshore oil rigs and Louisiana refineries, and appeared to have caused less damage than expected in New Orleans and surrounding areas.
But they quickly turned their attention to slowing global economic growth, speculating that will dampen demand for crude oil, even in developing countries such as China and India.
The Organization of Petroleum Exporting Countries is scheduled to meet Sept. 9 and has indicated it may take action to defend the $100 a barrel level.
Hurricane Hanna was predicted to come ashore in Georgia and South Carolina late in the week, and Tropical Storm Ike formed late Monday in the Atlantic Ocean and may become a hurricane in the next 36 hours as it approached the Bahamas.
